"The Outlook for Economic Activity" from the September 12-13, 2012 FOMC Minutes:

FOMC Minutes September 12-13, 2012...Conditional on their individual assumptions about appropriate monetary policy, participants judged that the
economy would grow at a moderate pace over coming
quarters and then pick up somewhat in 2013 before
expanding in 2014 and 2015 at a rate modestly above
what participants saw as the longer-run rate of output
growth. The central tendency of their projections for
the change in real GDP in 2012 was 1.7 to 2.0 percent,
somewhat lower than in June. Many participants cha-
racterized the incoming data as having been to the
weak side of their expectations at the time of the June
meeting; several participants also cited the severe
drought as a factor causing them to mark down their
projections for economic growth in 2012. However,
participants’ projections for 2013 and 2014 were gener-
ally slightly higher than in June; this reflected, in part, a
greater assumed amount of monetary policy accommo-
dation than in their June submissions as well as some
improvement since then in the outlook for economic
activity in Europe. The central tendency of partici-
pants’ projections for real GDP growth in 2013 was 2.5
to 3.0 percent, followed by central tendencies for both
2014 and 2015 of 3.0 to 3.8 percent. The central ten-
dency for the longer-run rate of increase of real GDP
remained at 2.3 to 2.5 percent, unchanged from June.
While most participants noted that the increased degree
of monetary policy accommodation assumed in their
projections would help promote a faster recovery, par-
ticipants cited several headwinds that would be likely to
hold back the pace of economic expansion over the
forecast period, including slower growth abroad, a still-
weak housing market, the difficult fiscal and financial
situation in Europe, and fiscal restraint in the United
States.

Participants projected the unemployment rate at the
end of 2012 to remain close to recent levels, with a cen-
tral tendency of 8.0 to 8.2 percent, the same as in their
June submissions. Participants anticipated gradual im-
provement from 2013 through 2015; even so, they gen-
erally thought that the unemployment rate at the end of
2015 would still lie well above their individual estimates
of its longer-run normal level. The central tendencies
of participants’ forecasts for the unemployment rate
were 7.6 to 7.9 percent at the end of 2013, 6.7 to
7.3 percent at the end of 2014, and 6.0 to 6.8 percent at
the end of 2015. The central tendency of participants’
estimates of the longer-run normal rate of unemploy-

ment that would prevail under the assumption of ap-
propriate monetary policy and in the absence of further
shocks to the economy was 5.2 to 6.0 percent, un-
changed from June. Most participants projected that
the gap between the current unemployment rate and
their estimates of its longer-run normal rate would be
closed in five or six years, while a few judged that less
time would be needed.

Figures 3.A and 3.B provide details on the diversity of
participants’ views regarding the likely outcomes for
real GDP growth and the unemployment rate over the
next three years and over the longer run. The disper-
sion in these projections reflects differences in partici-
pants’ assessments of many factors, including appropri-
ate monetary policy and its effects on the economy, the
rate of improvement in the housing sector, the spillover
effects of the fiscal and financial situation in Europe,
the prospective path for U.S. fiscal policy, the extent of
structural dislocations in the labor market, the likely
evolution of credit and financial market conditions, and
longer-term trends in productivity and the labor force.
With much of the data for the first eight months of
2012 now in hand, the dispersion of participants’ pro-
jections of real GDP growth and the unemployment
rate this year narrowed in September compared with
June. The range of participants’ forecasts for the
change in real GDP in 2013 and 2014, however, was
little changed from June, on balance. The distribution
of projections for the unemployment rate was not
much altered for 2013, while for 2014 it narrowed a bit
and shifted down slightly. The range for the unem-
ployment rate for 2015 was 5.7 to 6.9 percent. As in
June, the dispersion of estimates for the longer-run rate
of output growth was fairly narrow, with the values
being mostly from 2.2 to 2.7 percent. The range of
participants’ estimates of the longer-run rate of unem-
ployment was 5.0 to 6.3 percent, a similar range to that
in June; this range reflected different judgments among
participants about several factors, including the outlook
for labor force participation and the structure of the
labor market...

"The Outlook for Economic Activity" from the September 12-13, 2012 FOMC Minutes:

FOMC Minutes September 12-13, 2012...Conditional on their individual assumptions about appropriate monetary policy, participants judged that the
economy would grow at a moderate pace over coming
quarters and then pick up somewhat in 2013 before
expanding in 2014 and 2015 at a rate modestly above
what participants saw as the longer-run rate of output
growth. The central tendency of their projections for
the change in real GDP in 2012 was 1.7 to 2.0 percent,
somewhat lower than in June. Many participants cha-
racterized the incoming data as having been to the
weak side of their expectations at the time of the June
meeting; several participants also cited the severe
drought as a factor causing them to mark down their
projections for economic growth in 2012. However,
participants’ projections for 2013 and 2014 were gener-
ally slightly higher than in June; this reflected, in part, a
greater assumed amount of monetary policy accommo-
dation than in their June submissions as well as some
improvement since then in the outlook for economic
activity in Europe. The central tendency of partici-
pants’ projections for real GDP growth in 2013 was 2.5
to 3.0 percent, followed by central tendencies for both
2014 and 2015 of 3.0 to 3.8 percent. The central ten-
dency for the longer-run rate of increase of real GDP
remained at 2.3 to 2.5 percent, unchanged from June.
While most participants noted that the increased degree
of monetary policy accommodation assumed in their
projections would help promote a faster recovery, par-
ticipants cited several headwinds that would be likely to
hold back the pace of economic expansion over the
forecast period, including slower growth abroad, a still-
weak housing market, the difficult fiscal and financial
situation in Europe, and fiscal restraint in the United
States.

Participants projected the unemployment rate at the
end of 2012 to remain close to recent levels, with a cen-
tral tendency of 8.0 to 8.2 percent, the same as in their
June submissions. Participants anticipated gradual im-
provement from 2013 through 2015; even so, they gen-
erally thought that the unemployment rate at the end of
2015 would still lie well above their individual estimates
of its longer-run normal level. The central tendencies
of participants’ forecasts for the unemployment rate
were 7.6 to 7.9 percent at the end of 2013, 6.7 to
7.3 percent at the end of 2014, and 6.0 to 6.8 percent at
the end of 2015. The central tendency of participants’
estimates of the longer-run normal rate of unemploy-

ment that would prevail under the assumption of ap-
propriate monetary policy and in the absence of further
shocks to the economy was 5.2 to 6.0 percent, un-
changed from June. Most participants projected that
the gap between the current unemployment rate and
their estimates of its longer-run normal rate would be
closed in five or six years, while a few judged that less
time would be needed.

Figures 3.A and 3.B provide details on the diversity of
participants’ views regarding the likely outcomes for
real GDP growth and the unemployment rate over the
next three years and over the longer run. The disper-
sion in these projections reflects differences in partici-
pants’ assessments of many factors, including appropri-
ate monetary policy and its effects on the economy, the
rate of improvement in the housing sector, the spillover
effects of the fiscal and financial situation in Europe,
the prospective path for U.S. fiscal policy, the extent of
structural dislocations in the labor market, the likely
evolution of credit and financial market conditions, and
longer-term trends in productivity and the labor force.
With much of the data for the first eight months of
2012 now in hand, the dispersion of participants’ pro-
jections of real GDP growth and the unemployment
rate this year narrowed in September compared with
June. The range of participants’ forecasts for the
change in real GDP in 2013 and 2014, however, was
little changed from June, on balance. The distribution
of projections for the unemployment rate was not
much altered for 2013, while for 2014 it narrowed a bit
and shifted down slightly. The range for the unem-
ployment rate for 2015 was 5.7 to 6.9 percent. As in
June, the dispersion of estimates for the longer-run rate
of output growth was fairly narrow, with the values
being mostly from 2.2 to 2.7 percent. The range of
participants’ estimates of the longer-run rate of unem-
ployment was 5.0 to 6.3 percent, a similar range to that
in June; this range reflected different judgments among
participants about several factors, including the outlook
for labor force participation and the structure of the
labor market...